Cost of solar panels in Indiana (2024)

How much do solar panels cost in Indiana?

With professional installation, a typical 8-kilowatt residential solar panel system in Indiana costs $24,800. That price drops to $17,360 after the full federal solar investment tax credit (ITC). This doesn’t include a storage battery, which sometimes costs as much as the panels.

Most installers price systems based on wattage. As of publishing, the average cost per watt is $3.10 in Indiana.

The size of your solar panel system is another big factor in your overall solar costs. A typical Indiana home requires a system size of 11.01 kW (kilowatts). You might need a smaller or larger system, depending on your household energy use.

Average solar installation cost by system size in Indiana

Are solar panels worth it in Indiana?

Solar isn’t as popular in Indiana as in some other states. This might have something to do with the state’s lack of net metering, which compensates residents for any extra solar power sent into the local grid in other states.

Still, considering ever-increasing energy costs, many Hoosiers find solar worth it in the long run. On average, Indiana homeowners with solar panels avoid approximately $56,472 in total utility costs over 25 years.

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

Some, like Gary in Danville, switch to solar for the “emergency backup for a potential future problem.” And it’s working. Gary said his solar energy backup system lets him “get through an emergency power outage for multiple days.” Gary told us.

If your house is a good candidate for solar, it’s at least worth considering. We suggest using Project Sunroof to calculate your potential savings and the National Renewable Energy Laboratory's PVWatts Calculator to estimate how much electricity a solar panel could produce over a year on your house.

One resident, Jerry in Indianapolis, admitted he was “a bit skeptical” about going solar. “It looks cool on the house but having it installed in the winter months — I had my doubts,” he told us. Since Jerry went solar, he pays less than $20 per month.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in Indiana

The equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall solar costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Local permits and fees are a small part of the final price.

Solar equipment

The first thing that probably comes to mind when you think of going solar is the panels. Most residential installations use polycrystalline or monocrystalline solar panels. The difference comes down to efficiency and materials: Monocrystalline panels are made from pure, single silicon crystals; various silicon fragments melted together are used to make polycrystalline panels. Generally, polycrystalline is cheaper, but monocrystalline is considered the best bang for your buck.

Solar arrays also contain mounting equipment, wiring and other devices, such as inverters, batteries or a monitoring system. 

• Solar batteries: A battery stores energy for later use. Expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
• Solar inverter: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC). Prices usually range from $1,000 to $3,000.
• Monitoring system: Some companies include a solar monitoring system to track how much energy your system produces and if there are any problems. If not, you can buy a standalone system for $80 to $400.

Condition of your roof

Quality solar panels should last 25 to 30 years, and your roof needs to last just as long. Otherwise, it will be expensive to remove the panels, repair or replace your roof, and then reinstall the panels. This is a frustrating and expensive process you should avoid if you can. Get your roof inspected, fixed or replaced before you go solar.

For example, Sabine in Merrillville bought solar panels in 2019. There was a roof leak soon after. “It was a long tedious process but we hung in there,” Sabine told us. “Finally the roof was repaired and it took about 7 weeks to get the panels reinstalled. That means there was NO power generation during peak months, and we had to pay electric bills.”

» SHOULD YOU: Replace your roof before going solar?

Labor costs

Solar equipment costs are going down, but labor costs are higher than ever in some areas. Installing solar panels yourself might seem cheaper since you'll save on labor costs. However, there are several safety factors to consider. If not installed correctly, solar panels pose safety hazards. You also run the risk of roof leaks and other problems.

Other cost factors

Don't forget about the local permits and fees required for solar panel installation. Solar panels also require minimal maintenance, but you should consider the lifetime cost. This includes potential repairs or replacement of components, periodic cleaning and system monitoring. These costs are generally low but shouldn’t be overlooked.

How to save money on solar panels in Indiana

There’s no way around it — solar panel installations are expensive. Here are some tips to maximize your savings on solar panels in Indiana:

• Lower your electrical load first: For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load. If you use less electricity, you need fewer solar panels, making the whole system cheaper.
• Compare cost estimates: As with most expensive purchases, you should get quotes from at least three or four different solar companies.
• Use incentives: In addition to government incentives, you might be able to take advantage of manufacturers’ rebates.

» MORE: Why are solar panels so expensive?

Solar incentives, tax credits and rebates in Indiana

The federal solar investment tax credit (ITC) is the best financial incentive for going solar in Indiana. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes. 

The ITC drops to 26% in 2033 and then 22% in 2034.

Don’t get confused: The ITC is not a rebate or a refund. For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $5,000 in taxes, the credit reduces your debt to $2,000. Any unused portion of the credit rolls over into the next year. However, it is possible to get a refund check if the credit makes it so that you overpaid during the tax year that your system became operational.

Additional solar incentives in Indiana include a property tax exemption, meaning your property tax bill won’t increase if solar panels add to the market value of your home.

How can I pay for solar panels in Indiana?

You can pay upfront, take out a solar loan or lease the system. Leasing can include little to no down payment but may come with other fees and fewer financial benefits in the long run.

Using a home equity line of credit or loan to finance a solar installation can be a financially beneficial option — home equity interest rates are relatively low, and homeowners can still take advantage of the federal solar investment tax credit.

» SOLAR PANELS: Lease vs. buy

Compare solar installation companies in Indiana

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in Indiana.

Bottom line

Residential solar panel system costs generally fall between $10,000 and $30,000 or higher, depending on factors like the system's size, local labor rates and available incentives. Indiana homeowners with solar panels can typically save more than that in total avoided energy costs over the lifetime of a system.

The ConsumerAffairs Research Team has conducted extensive research to compare the costs of going solar in Indiana and other states.

Solar costs vs. savings: Indiana and nearby states